San Francisco Chronicle
By John Chiang
Just as the latest season of the HBO medieval fantasy TV series “Game of Thrones” warned that “winter is coming,” we know the apocalyptic consequence of climate change is coming, too. But our threat is much scarier than a fictional army of the undead. The enemy is us.
Climate-change deniers led by President Trump continue to willfully impede efforts to save the planet. And they have isolated the United States from the rest of the world’s efforts to slow global warming. Only the United States, Nicaragua and war-torn Syria are not parties to the Paris climate accord.
Undeterred, California continues to lead. We are building infrastructure to reduce reliance on fossil fuels, have created a model cap-and-trade program, introduced groundbreaking policies to reduce pollution from industries and vehicles, and remain the global center of electric vehicle and renewable energy innovation.
Now, California has the opportunity to once again raise its leadership banner by hastening the development of a green bond market that will pay for the less-polluting infrastructure we so desperately need to counter climate change.
A green bond is a form of public or private-sector debt used to finance climate-friendly and environmental projects — from renewable energy, energy efficiency, clean transportation, and reforestation to water management, pollution control, seawall construction, and much more.
The green bond market has grown rapidly in Europe and Asia, but it lags in the United States, the world’s second-largest emitter of greenhouse gases. Bond issuances are sporadic, especially in the corporate sector. And there is less pressure on issuers here than on their European and Asian counterparts to go green.
A commitment was made by the nearly 200 nations that assembled in Paris to replace infrastructure powered by fossil fuels with low-carbon alternatives. Worldwide, the price tag for this conversion is pegged at $93 trillion — $8 trillion for the United States alone. Here in California, we need $853 billion in public funds over the next 10 years just for transportation, water and K-12 school construction.
Underinvestment in our infrastructure at a national and state level is undisputed. Many are struggling to fashion an answer.
The answer, in fact, is under our noses — an enormous, vibrant green bond market that is within reach. Green bonds have a ready-made investor base of individuals attracted to environmentally friendly products. The bonds could be sold by state and local government entities and proceeds used to do environmentally related work, such as solar energy installations or electric school buses.
But the need for action is urgent.
California has a proud history of being a grand laboratory that has produced environmental policies that have gone on to be adopted by countries around the world. With green bonds we can unleash a torrent of billions of dollars of capital to meet the threat we all should realize is coming … one that is far more frightening than the “Game of Thrones” fantasy.
We, of course, do not face an army of the undead. We face ourselves. We are kindling the Earth and its atmosphere.